Sprint has confirmed that it has entered a "definitive agreement" with Clearwire to bring its stake to 100 percent.

In a deal worth $2.2 billion -- $100 million over the firm's first formal offer -- America's third largest cellular network will now own its rival cellular network Clearwire in full. The deal, which works out at $2.97 per share, will give Clearwire an enterprise value of approximately $10 billion, including net debt and spectrum lease obligations of $5.5 billion.

The agreement between both cellular networking firms will result in Sprint's spectrum portfolio increasing, as well as the addition of 11 million Clearwire subscribers. Clearwire's 2.5 GHz spectrum assets will be added to Sprint's network, which the company says will make the transition to LTE- enabled networks easier.

Sprint CEO Dan Hesse said:

"Today's transaction marks yet another significant step in Sprint's improved competitive position and ability to offer customers better products, more choices and better services. Sprint is uniquely positioned to maximize the value of Clearwire's spectrum and efficiently deploy it to increase Sprint's network capacity. We believe this transaction, particularly when leveraged with our SoftBank relationship, is further validation of our strategy and allows Sprint to control its network destiny."

According to Sprint, the deal has been given "unanimous" approval by Clearwire's board of directors.

In October, Sprint announced that it would sell a 70 percent stake in the company to Japan's Softbank for $20.1 billion in order to receive $8 billion in capital to improve its mobile network. Under the terms of the merger agreement between Sprint and Softbank, the Japanese firm has given its necessary blessing to the deal.

The rumored agreement faced potential setbacks last week as reports suggested Softbank -- a major shareholder within the cellular networking firm -- was reluctant to allow Sprint to offer more than $2.90 a share after Clearwire shareholders criticised earlier bids, and wanted up to $5 per share.

In pre-market trading this morning, Clearwire shares stand at $3.08 per share.

Update 13.35GMT:

"The value of this transaction may go down over time for both sets of investors if we delay," Sprint CEO Dan Hesse

On a conference call detailing the terms of the deal, Sprint's CEO Dan Hesse said that the transaction between both parties offers "a fair price" for both sets of shareholders, and is a "critical step" in Sprint's future and to boost the firm's spectrum portfolio. The transaction is deemed necessary in order for Sprint to meet its growing capacity requirements and for the acceleration of a more "robust" network that will prove a competitive force in the industry.

In addition, Hesse said that the deal would boost the U.S. cellular network's top and bottom-line growth. In conclusion, the CEO said that he believed the decision was right for shareholders, Sprint itself, and the American consumer.

Clearwire CEO Erik Prusch explained a number of capital-generating alternatives the firm considered once Sprint let it be known it was interested in a potential transaction.Considering limited capital and restricted ability to develop its LTE network, Prusch said the firm "had to scale back its aspirations" and eventually became "even more dependent on Sprint" as LTE demand took hold.

Clearwire considered a number of alternatives, which included adding new non-Sprint customers, selling excess spectrum, additional financial restructuring and debt management to try and shore up its balance books. However, Prusch says that the value of the firm's spectrum "was well below recent speculation," and even if the firm could sell large chunks of its excess spectrum, it may be "traded to someone else -- including Sprint -- which wouldn't be good [for the firm]."

Clearwire was unable to secure a second major wholesale customer which would potentially have helped clear up outstanding debt, which in addition to its spectrum lease, now reaches approximately $6.3 billion and will remain outstanding.

If the deal does not go ahead, Clearwire's CEO said that "financial restructuring is possible," but investors considered a merge with Sprint as a better alternative to restructuring or the sale of spectrum.

Additional financial help and efficiency measures -- planned for the first year -- will be given to Clearwire in order to try and clear debt as well as allow the firm to continue building its LTE network.

Financial help, as well as the deal itself, is reliant on the closure of the agreement between Sprint and Softbank. Sprint's shareholders must grant a majority vote of approval for the purchase to go forward.